Do you have an insurance bad faith claim? How to Check the Insurance Company’s Bad Faith Record

Consumers may consider the insurance bad faith claims record of an insurance company before purchasing a policy. Unfortunately, not all of companies honor their contractual obligations. So to avoid becoming the victim of bad faith, it’s important to look into their history. When bad faith claims against insurance companies are necessary, though, an Aurora personal injury attorney can assist.

What does it mean when an insurance company has acted in bad faith?

This includes not only failing to fulfill obligations of a contract, but intentional misleading or deceptive practices, too. This is different than a dispute, where you might be negotiating a claim under a normal set of circumstances.

With insurance bad faith claims, the company is trying to avoid paying what a consumer is contractually entitled to receive. So to avoid the need for bad faith claims against the insurance company, there are a couple of ways to check the company’s record.

How do you check a company’s insurance bad faith claims record?

One way is through the National Association of Insurance Commissioners (NAIC). Before you decide to purchase a policy, this is a great resource for learning about complaints and other important information.

You can access this information online by inputting the name of the company and the business type (property/casualty for auto insurance). You can then select from a list the specific company according to its home office.

Each company has a link to “closed complaints”. There are four types of closed complaint reports/counts that can be accessed: by state, code, ratio report and trend report.

Another way to check an insurance company’s record is through the state insurance department. In Colorado, it is the Department of Regulatory Agencies. Consumers can look into disciplinary actions that may exist for any one insurance company.

Common Complaints Involving Insurance Companies

According to the NAIC, auto insurance companies rank number two in terms of number of complaints filed. So far in 2013, there have already been 2,737 closed consumer complaints.

Following are the number of closed complaints pertaining to auto coverage in the past three years:

 

• 2012 – 25,037;

 

• 2011 – 24,838; and
• 2010 – 26,157.

The NAIC also reports on the top ten reasons for consumer complaints, which were the following in 2012:

• handling – delays;
• handling – denials;
• handling – unsatisfactory offer/settlement;
• handling – specific to state;
• underwriting – cancellation;
• policyholder service – premium refund;
• underwriting – premium and rating;
• policyholder service – questions on coverage;
• policyholder service – premium notice/billing; and
• underwriting – nonrenewal.

The handling of claims is consistently a problem for consumers. In fact, the top four complaints on claims handling are the same ones for the year 2013.

What are some bad faith tactics used?

Just because a claim is delayed, denied or the payment being offered seems low, doesn’t mean an insurance bad faith claim is warranted. When it does become an issue and when bad faith claims against insurance companies may be filed is when the basis is unreasonable or there is a clear failure to meet the obligations of the policy.

Tactics that may be used to delay a claim is to sit on the paperwork, pass it around or request information that had already been submitted. In denying a claim, it could be the result of not properly investigating the case or a low settlement could be offering less than the policy limits.

Consumers who wish to pursue bad faith claims against insurance companies may consult an Aurora personal injury attorney to go over their legal options. A lawyer can help fight back against bad faith practices and can assist consumers in the pursuit of insurance bad faith claims.